Why Bitcoin, ETH and XRP are Still Falling Despite the Steady Fed Holding Rates

Bitcoin, Ethereum (ETH), and XRP came under renewed selling pressure after the US Federal Reserve kept interest rates unchanged, as traders weighed the possibility of another rate increase in December. Weakness across technology stocks and a wave of leveraged liquidations added to the pressure on the crypto market.

Bitcoin briefly climbed above $81,000 after the Federal Open Market Committee (FOMC) announced its decision but later slipped below $80,000. The reversal showed that keeping rates unchanged was not enough to reassure investors about the outlook for monetary policy.

The market is now watching US inflation data, Treasury yields, and the monthly expiry of Bitcoin and Ethereum options for clues about the next move.

Crypto liquidations rise as Bitcoin falls below $80,000

More than $350 million in cryptocurrency positions were liquidated over a 24-hour period, according to market data reported by CoinGlass.

Long positions accounted for roughly $215 million of the liquidations, while short positions represented more than $124 million in the reported figures. More than 81,000 traders were reportedly liquidated during the period.

Bitcoin accounted for approximately $67 million in liquidations, while Ethereum also saw substantial forced position closures. XRP, Solana (SOL), Zcash (ZEC), and other tokens faced additional pressure as selling spread across the market.

Liquidations occur when leveraged traders no longer have enough collateral to maintain their positions. Exchanges automatically close those positions, potentially adding further buying or selling pressure during volatile conditions.

The downturn also coincided with weakness in technology stocks. Investors have become more cautious about whether heavy spending on artificial intelligence infrastructure will deliver the returns companies have projected. When technology shares decline, crypto assets can also face selling as investors reduce exposure to riskier investments.

Why the Fed’s decision failed to lift crypto prices

The Fed voted 10 - 2 to keep its benchmark interest rate in the 3.75% - 4% range. Governors Lisa Cook and Beth Hammack dissented, preferring a 25-basis-point increase instead.

The decision initially gave Bitcoin some support because rates remained unchanged. However, the two dissenting votes and the Fed’s cautious outlook signaled that policymakers remain concerned about persistent inflation.

Related: Fed Holds Interest Rates at 3.75% - 4.00%: What it Means for Bitcoin and Crypto Markets

Fed Chair Kevin Warsh also emphasized uncertainty around the path of monetary policy. Higher energy prices, inflationary pressures, and the economic effects of geopolitical tensions are making it harder for investors to predict when financial conditions might ease.

That matters for crypto because interest rates influence the relative attractiveness of risk assets. If investors expect borrowing costs to remain high or rise further, they may prefer assets that offer more predictable returns rather than volatile cryptocurrencies.

Markets subsequently priced in roughly an 81% probability of a December rate increase, according to the CME FedWatch figures cited in market reports. This is a market-implied probability, not a confirmed Fed decision.

Inflation expectations, Treasury yields, and the dollar add pressure

Investors are also preparing for the next US Personal Consumption Expenditures (PCE) inflation report. The PCE price index is the Fed’s preferred measure of inflation, making it an important input into future interest-rate decisions.

Market expectations cited in reports point to a 0.3% monthly increase in core PCE inflation for September, with annual PCE inflation forecast at 3.6%, compared with 3.4% previously. These are forecasts rather than confirmed readings.

If inflation comes in hotter than expected, traders could increase their bets on another rate hike. A softer report, on the other hand, could ease some of the pressure on risk assets.

Bond-market movements are adding to the uncertainty. The US 10-year Treasury yield moved slightly above 5%, while the US Dollar Index approached 102.23 in the reported market snapshot.

Higher Treasury yields can make fixed-income investments more attractive relative to assets that do not generate cash flows, while a stronger dollar can create additional headwinds for cryptocurrencies. Neither relationship guarantees a particular price move, but both help explain why crypto can fall even when the Fed leaves rates unchanged.

Bitcoin and Ethereum options expiry puts traders on alert

Monthly options expiry is another factor traders are monitoring. More than 135,000 Bitcoin options, with a reported notional value of approximately $10.8 billion, were scheduled to expire on Deribit on Friday, October 30.

The reported Bitcoin put-call ratio was 0.52. A ratio below one means there are more call options than put options by the measure used, although it does not guarantee that traders are bullish or that prices will rise.

Bitcoin’s reported max-pain level was $78,000. Max pain is the price at which the aggregate payout to options holders would be minimized at expiry under a particular calculation. It is not a reliable price target or a prediction of where Bitcoin will trade.

The probability of Bitcoin expiring above the $80,500 strike was reported to be below 50%. That estimate can change as prices, volatility, and positioning move closer to expiry.

Ethereum options worth approximately $775 million in notional value were also due to expire. The reported put-call ratio was 0.78, while ETH’s max-pain level stood at $2,450, above its cited market price of around $2,312.

Options expiry can contribute to short-term volatility as traders adjust or hedge positions. However, it is only one factor among several, and it does not determine the direction of the broader market on its own.

Bitcoin ETF inflows offer a contrasting signal

Despite the price weakness, demand for regulated Bitcoin investment products has not disappeared. US spot Bitcoin ETFs recorded $137.33 million in net inflows on October 28, extending their positive-flow streak to three consecutive sessions.

BlackRock’s IBIT accounted for $136.01 million of the latest daily total, according to the reported SoSoValue figures. Across October 26–28, the funds attracted approximately $423.66 million.

The inflows provide a counterpoint to the derivatives-driven selloff. ETF flows measure net capital entering or leaving the funds, while liquidations reflect leveraged positions being forcibly closed. The two can move in different directions over the same period.

Read Altcoin Buzz’s report on Bitcoin spot ETFs extending their inflow streak to three days for the latest fund-flow breakdown.

XRP is also facing its own technical pressure. Altcoin Buzz recently identified the $1.276 area as a key support level in its XRP price analysis. That level is relevant to XRP’s chart structure, although the wider macro environment could still influence whether buyers defend it.

What traders will watch next

The immediate focus is whether Bitcoin can regain and hold the $80,000 level, alongside the release of US PCE inflation data and the outcome of the monthly options expiry.

A hotter-than-expected inflation reading could reinforce expectations of another rate increase and keep pressure on risk assets. A softer reading could reduce those concerns, though technology-stock weakness and derivatives positioning may continue to affect short-term price action.

For now, the Fed’s decision to hold rates steady has not removed uncertainty. Bitcoin, Ethereum, and XRP remain sensitive to the possibility of tighter monetary policy, movements in traditional markets, and the unwinding of leveraged positions.